The World Bank Digital Inclusion and Innovation in Public Services in Argentina (P174946) Project Information Document (PID) Appraisal Stage | Date Prepared/Updated: 17-Feb-2021 | Report No: PIDA31230 Jan 23, 2021 Page 1 of 18 The World Bank Digital Inclusion and Innovation in Public Services in Argentina (P174946) BASIC INFORMATION OPS_TABLE_BASIC_DATA A. Basic Project Data Country Project ID Project Name Parent Project ID (if any) Argentina P174946 Digital Inclusion and Innovation in Public Services in Argentina Region Estimated Appraisal Date Estimated Board Date Practice Area (Lead) LATIN AMERICA AND CARIBBEAN 11-Feb-2021 30-Mar-2021 Governance Financing Instrument Borrower(s) Implementing Agency Investment Project Financing Republic of Argentina Secretariat of Innovation, Chief of Cabinet Office Proposed Development Objective(s) To improve the efficiency of and access to selected digital administrative services Components Digital public services Cross-cutting systems, data management and innovation Expansion of technological platforms and project management Project management and evaluation PROJECT FINANCING DATA (US$, Millions) SUMMARY -NewFin1 Total Project Cost 88.00 Total Financing 88.00 of which IBRD/IDA 80.00 Financing Gap 0.00 DETAILS -NewFinEnh1 World Bank Group Financing International Bank for Reconstruction and Development (IBRD) 80.00 Jan 23, 2021 Page 2 of 18 The World Bank Digital Inclusion and Innovation in Public Services in Argentina (P174946) Non-World Bank Group Financing Counterpart Funding 8.00 Borrowing Agency 8.00 Environmental and Social Risk Classification Moderate Decision The review did authorize the team to appraise and negotiate Other Decision (as needed) B. Introduction and Context Country Context 1. The COVID-19 outbreak hit Argentina when its economy faced significant macroeconomic imbalances and a highly uncertain outlook.1 Following a two-year recession, high inflation and lack of access to capital markets, the strict lockdown imposed to contain the spread of the pandemic triggered the sharpest GDP decline ever recorded, in March and April 2020. From the third quarter onwards, the Government gradually eased confinement measures, allowing economic activity to pick up at a slow pace. Implementation of the fiscal stimulus package (equivalent to 3.5 percent of GDP) coupled with an abrupt decline in revenues resulted in an estimated national government (primary) deficit of 6.5 percent of GDP in 2020, the largest since 1983. The lack of market access led to a full monetization of the deficit, which has exacerbated macroeconomic imbalances, notably by exerting pressures on reserves, which have seen a substantial erosion over the past months and on the persistent large gap between the official and parallel exchange rates. 2. The unprecedented economic contraction in 2020 (an estimated fall of 10 percent in real GDP), following two years of recession had a severe impact on employment and poverty. Labor market statistics point to a sharp decline in formal employment between the first and second quarter of 2020 (-9 p.p.), with a partial recovery to 37.4 percent in the third quarter.2 The impact on unemployment was relatively moderate - an increase of by 2.5 p.p. as an important share of workers stopped looking for jobs, leading to a massive fall in the activity rate from 47.7 to 38.4 percent.3 The Government implemented emergency fiscal measures which were relatively effective in mitigating the impact of the economic crisis on the most vulnerable. Still, levels of poverty and extreme poverty (at 40.8 and 10.5 percent, 1 Source for estimates and projections in this section (unless otherwise stated): INDEC National Income Accounts and World Bank staff calculations. 2 Source: INDEC labor market statistics 3 Source: INDEC labor market statistics Jan 23, 2021 Page 3 of 18 The World Bank Digital Inclusion and Innovation in Public Services in Argentina (P174946) respectively) reached their highest level since 2016 in the first semester of 2020.4 3. Real GDP is projected to partially recover by 6 percent in 2021 but is not expected to reach 2019 GDP levels before 2023. Economic recovery has gradually picked up as containment measures have been progressively lifted, building on the economy’s ample idle capacity. However, uncertainty, price and capital controls curtail the potential for investment growth, while the need to reduce the large fiscal deficit limits the scope for demand stimulus. The draft budget 2021 foresees a reduction in the primary deficit from an estimated 8.3 percent of GDP in 2020 to 4.2 percent in 2021. This goal is helped by the successful restructuring of external debt in August, which shifts the bulk of external debt service payments to beyond 2026. There are important downside risks to this baseline scenario, notably a reversal in the so far subdued inflationary dynamics, which has been held back by the unprecedented drop in demand and price controls. Sectoral and Institutional Context 4. In 2015, the national authorities launched an ambitious digital governance and state modernization plan aimed at achieving “a public administration at the service of citizens� and efficient, effective, and good-quality service delivery. The modernization plan’s objectives spans five axes: a) technology and digital government; b) integrated management of human resources; c) results-based management and public commitments; d) open government and public innovation; and e) development of a digital country strategy. Implementation of this plan has significantly accelerated progress on the digital governance and state modernization agenda, supported by a World Bank-financed Modernization and Innovation Project approved in January 2017. Argentina reached second place in Latina America on the 2020 UN E-Government Index and 32nd place in the world. Argentina’s GovTech Maturity index (0.80) also reflects the progress, ranking the country well above the world average (0.50).5 Progress on digitalization of government services helped the Government respond effectively to the COVID-19 pandemic. However, COVID-19 also put government systems under extraordinary stress, revealing the limitations of service delivery capacity under the current service delivery model. 5. Digital transformation of core government systems has allowed state agencies to move to paperless administration, but many of the processes underlying the digital government services have yet to be restructured and use of data analytics tools remains limited. Deployment of the e-filing system (Gestión Documental Electrónica, GDE) in the national public administration from 2015 onwards allowed digital processing and remote operation of most administrative procedures. Today, over 450 entities in the central national administration manage procedures using the GDE system. The GDE system played an important role in ensuring business continuity during the pandemic with a 73 percent increase in registered users since March 2020. Digital government services were designed using paper-based processes, which facilitated a rapid roll-out of services. However, this limits the benefits of digitalization and falls far short of delivering a seamless experience to users. Only 30 out of more than 1,400 services have been reengineered: most of the services follow the inefficient procedures used in the former paper- based system. Digitization has created a data rich environment but there is limited use of data and data 4 Source:INDEC poverty statistics 5 The World Bank defines GovTech as the use of technology to support government operations, service delivery and transparency. GovTech is a process of whole-of-government public sector modernization that places the citizen at the center of reform. The GovTech Maturity Index (GTMI) measures four foundational GovTech blocks: enhancing service delivery, supporting core government systems, mainstreaming citizen engagement and GovTech enablers. Jan 23, 2021 Page 4 of 18 The World Bank Digital Inclusion and Innovation in Public Services in Argentina (P174946) analytics tools, such as machine learning and artificial intelligence, to support policy and managerial decision-making. Government agencies do not have concrete plans to maximize data analysis and prepare user-targeted business intelligence tools to improve decision making and foster innovation in the public sector for service delivery. 6. On-line platforms combined with electronic authentication have improved citizens’ and businesses’ access to digital government services, but the catalog of available digital services remains limited, and there is a need to enhance their functioning to better target the needs of users, including women and other vulnerable groups. The Mi Argentina portal serves as a single-entry point for citizen interaction with the Government, a personalized and unified portal for state services and news, accessible online and through a mobile application. The portal was launched in 2016, integrating multiple websites into one single domain (argentina.gob.ar). Between 2016 and 2019, the platform had 126 million visitors and 1.5 million users6. A complementary platform for remote access to services (Trámites a Distancia, TAD) was launched in 2017. The TAD platform facilitates delivery of digital government services, especially for businesses, through a biometric recognition system, integration of digital signatures to validate actions within the TAD and GDE platforms and the interconnectivity with the tax-collection agency platform to verify identity and allow administrative procedures to be completed online. A national appointment system (Sistema Nacional de Turnos) was launched in 2018, allowing citizens to schedule face-to-face meetings for services that cannot be processed completely online. Deployment of these platforms was accompanied by user-friendly help desks to support citizens and firms by email, mobile phone applications and other online forms. Automated processing has improved government capacity to provide digital government services to citizen and business. The Mi Argentina portal registered users increased from 1.5 million to 5 million since the beginning of the COVID-19 outbreak. TAD provided access to critical information such as data on health status and the “Certificate for circulation� during the COVID -19 lockdown. From March to November 2020 registered TAD users (both citizens and businesses) increased from 0.7 million to 2 million. By December 2020, 2,195 e-services were included in the platform, more than 5.4 million e-services initiated, and more than 8.2 million e-files generated. While the range of existing digital government services is impressive, there are still gaps and significant problems with integration, reengineering and streamlining of processes to improve quality of online service provision and better target vulnerable groups. There is also a significant gender gap in use of e-services. In 2017, men carried out 45 percent government administrative processes face-to-face, while women did so at a rate of 55 percent.7 Data from TAD between July 2016 to September 2019 show that only 32 percent of registered users were female and only 24.5 percent of administrative processes were completed by women, with this share dropping to 27 and 19 percent respectively outside the Province of Buenos Aires and the Autonomous City of Buenos Aires.8 7. The e-procurement systems of the government, among the most important digital government services for public administration and businesses, can improve functionality using data analytics and by enhancing transparency. All public procurement processes use the Compr.ar and Contrat.ar portals. The systems have 38,000 registered vendors. Since 2018, the procurement portal has tracked information on firms’ integrity plans, as mandated by the Ministry of Justice. E-procurement has been implemented in parallel to the centralization of the regulatory function for goods, services and civil works under a single 6 https://www.linkedin.com/pulse/argentina-gobiernodigital-daniel-abadie/?trackingId=sAUaCoFW1cjG29ncfUg1mw%3D%3D 7 Data from Latinobarometro 2017. 8 Analysis covers individuals (personas fisicas). The Province and the City of Buenos Aires generate 71.7 percent of all administrative processes. Jan 23, 2021 Page 5 of 18 The World Bank Digital Inclusion and Innovation in Public Services in Argentina (P174946) agency, providing the National Procurement Office (Oficina Nacional de Contrataciones, ONC) with the powers to dictate the operational rules necessary for the implementation of the systems. ONC manages and regulates the National Constructor’s Registry for Public Works for construction firms and public works consulting firms. However, ONC has yet to operationalize the registry electronically. ONC makes little use of data analytics and artificial intelligence to inform procurement decisions and identify red flags in procurement. Building on steps taken to publish procurement data in the context of the COVID-19 emergency response, further efforts are needed to enhance transparency by adopting open contracting standards and open data strategies to make the data easily accessible and reusable by non-state actors. 8. A national open data policy launched in 2016 and the open data portal (Datos Argentina) have helped create an enabling environment for open government, but data use remains limited, hindering development of data-driven digital innovations. Argentina was one of the first countries in Latin America to become a member of the Open Government Partnership (OGP) in 2012 and is currently implementing the Fourth National Open Government Action Plan 2019-2021, co-created through a process designed by the National Roundtable on Open Government following recommendations made by the OECD and the OGP-IRM. The 2016 National Law 27275 on Access to National Public Information includes active transparency obligations that require public agencies to provide information in a clear and comprehensible manner, using online platforms and open data formats. The Government created a variety of digital channels through which citizens and other stakeholders can interact with the public sector, including the Open Government Roundtable and the Online Public Consultation Fora. The operation of digital government tools and technologies has generated vast amounts of data gathered and stored in standardized formats. Despite these efforts, Argentina’s open data ecosystem mostly operates in silos. Data users such as citizens, civil society organizations and entrepreneurs are not actively involved in the design and use of open data or in determining which datasets will be released to the public. The supply of data is mostly driven by institutional willingness. The government has taken steps to improve data use through the establishment of a national public innovation center and a digital government observatory that will steer and promote the use of data for public innovation. Further efforts are needed to foster collaboration with civil society and the private sector to promote data-enabled innovations in digital government services for citizens and businesses. 9. The government has made progress in improving access to digital government services at the subnational level, but further work is needed to deliver digital government services at the same standards as the national administration. In a federal country like Argentina, the roll out of digital platforms and processes at the subnational level is a critical component of the digital government reform agenda. The 23 provinces, the Autonomous City of Buenos Aires and the more than 2,000 municipalities in the country have a diverse and, compared to the national government, a generally less developed set of digital government services for citizens and businesses. Responding to their needs, the País Digital program launched by the national government in 2016 supports gradual implementation of shared e- services for remote municipalities using centrally supported cloud services. This allows municipalities to use high-quality applications at a very low cost. The national government has also provided subnational governments with administrative applications. The e-filing system has been deployed in eight Provinces and the e-procurement system in four provinces. More than 1,000 municipalities covering 80 percent of the Argentine population have implemented at least one digital solution provided by the national government. Building on these achievements, there is a need to intensity efforts to adapt systems to the needs of subnational administrations. Recognizing this challenge, the Government has recently signed (or is in the process of signing) institutional agreements with ten provincial governments that will guide the implementation of subnational initiatives for online services. These agreements cover: e-filing; e- Jan 23, 2021 Page 6 of 18 The World Bank Digital Inclusion and Innovation in Public Services in Argentina (P174946) procurement; public vendor administration digital platform; digital human resources management; digital civil registry; digital signature and TAD. Ongoing analytical work supported by the World Bank (P172808) is taking stock of the digital governance reform strategy across provinces and will help identify priority GovTech reforms to be implemented at the subnational level. 10. A significant expansion in fiber optic connectivity combined with high penetration of mobile access internet services has enabled the expansion of digital government services, but additional investments in digital service centers are needed to improve access for those otherwise excluded and vulnerable groups. Led by the Argentine Company for Satellite Solutions (Empresa Argentina de Soluciones Satelitales Sociedad Anónima, ARSAT), a decentralized state-owned company created in 2006 to provide telecommunication services to key Government entities, investments in broadband have increased connectivity with an expansion in the fiber optic network from 6,500km in 2015 to 30,000km in 2019. Internet access reaches 80 percent of the population in Argentina, well above regional peers such as Colombia, Mexico, Brazil and Uruguay where access ranges between 64 and 74 percent9 There is some variation in connectivity across regions, but these are less significant than the rural-urban digital divide. In rural areas, 45 percent of locations lack broadband internet coverage. In September 2020, President Fernandez renewed the Government’s commitment to deepen internet penetration through ARSAT with the launch of “Plan Conectar�, a national connectivity plan. Alongside these efforts to expand connectivity, the Government intends to expand coverage of digital service centers (Puntos Digitales) in rural municipalities and peri-urban areas. The digital service centers program (Programa Puntos Digitales) was launched in 2010 to promote digital inclusion and reduce the digital gap, promote citizen’s rights, foster digital job skills and empower local communities. By December 2020, there were digital service centers in 570 locations. The digital service centers provide a reliable platform for citizens to access and seek advice on government services and participate in distance learning through online webinars. The Service centers have played an important role in the COVID-19 emergency response: facilitating access to government social protection programs such as the Emergency Family Income (Ingreso Familiar de Emergencia, IFE); serving 1.7 million users, with 80,000 participants in webinars, more than 170,000 new users of the online learning platform and 350,000 people assisted in completing administrative forms. 11. The growing supply of digital government services and expected increase in users will need to be supported by enhanced capability of the National Data Center. The Government provides shared infrastructure services to government agencies through ARSAT. ARSAT hosts the National Data Center. As digital government services and data use expand, ARSAT will need to expand its capacity to meet increased demand. The strengthening of ARSAT capabilities will include new and more secure cloud computing, hosting, and housing services that are expected to lead to cost savings for the Government in the medium term. In this context, data protection and cybersecurity risks are an important concern. Measures to prevent unauthorized access to government data are of utmost importance. 12. While Argentina has a solid regulatory environment on data protection and cybersecurity, enforcement remains a challenge. Privacy and data protection rights are recognized by the Argentine Constitution; several International Treaties executed by Argentina (with legal hierarchy superior to domestic laws); the Argentine National Civil and Commercial Code, and more recently the Personal Data Protection Law (PDPL) enacted in 2000 (2536/2000) and its Regulatory Decree (1558/2001). The national regulator in charge of enforcing the PDPL is the Argentine Agency of Access to Public Information (AAPI). 9 Data from Encuesta Permanente de Hogares 4T2019 – INDEC Jan 23, 2021 Page 7 of 18 The World Bank Digital Inclusion and Innovation in Public Services in Argentina (P174946) Despite a solid data protection regime, PDPL enforcement has so far been scarce in practice. As result, while Argentina is still more advanced than other Latin American countries in data protection matters, its regime is still less developed than OECD countries. The main authority in charge of regulating data protection and cybersecurity is National Directorate of Cybersecurity within the Secretariat of Public Innovation (Secretaría de Innovación Pública, SIP). SIP oversees the National Cybersecurity Strategy (NCS), launched in 2019 by the Resolution 829/2019, with the mandate to direct the development of plans and policies related to data protection and cybersecurity. Recent regulations have focused on personal data, financial entities, internet service suppliers, and public sector, establishing standards, and obligations to protect and safeguard sensitive data and institutional systems, and prevent cybersecurity incidents10. In November 2020 SIP organized the first meeting of the Cybersecurity Committee established by Regulation 829/2019.11 13. The Government recognizes the need for significant investments in digital skills for public servants and citizens, and effective management and implementation of an ambitious digital government reform agenda. The Government intends to roll out a federal training plan (Plan Federal de Capacitación) offering online courses to the general public for continuous learning on robotics, IT, programing, digital marketing and graphic design, as well as certification on digital jobs such as tablet, PC and cellphone repair. The digital service centers will provide the venue for citizens to access the federal training plan. The ambitious digital agenda needs to be embedded across the whole public sector through the development of digital and data management skills at all levels of the public sector, strengthening ongoing efforts of the National Institute of Public Administration (Instituto Nacional de la Administración Pública, INAP). 14. Changes in the government structure after the transition in December 2019 offer an opportunity to take the digital government reform agenda to the next level following a “whole-of- government� approach. Early on, the new administration emphasized its commitment to a citizen- centered public administration through the broad deployment of e-government and open government principles. Responsibility for the digital government reform agenda was moved closer to the center of government with the creation of SIP under the Chief of Cabinet of Ministers (Jefatura de Gabinete de Ministros, JGM). SIP has the mandate to lead the digital government and open government strategy. Its mission is to promote inclusion and equality in Argentina through a transparent government that safeguards connectivity and access to information and promote new technologies. SIP has sought the support of the World Bank to implement this ambitious agenda. 15. Argentina ranks amongst the ten emerging economies most vulnerable to climate change and was one of the first countries to ratify the Paris Agreement under the United Nations Framework Convention on Climate Change (UNFCCC) in 2016. Average annual temperatures are expected to increase by 1.5°C by mid-century and country wide annual average precipitation is expected to increase with wide geographic variation throughout the country12. These conditions are expected to lead to more frequent and intense natural disasters, including droughts, heat waves, water insecurity, flooding and sea level rise. The agriculture sector, rural and peri-urban areas are highly vulnerable to climate-related risks because 10 Personal Data Protection Law, No. 25.326 of 2000; the Argentinian data protection authority's ('AAIP') Resolution No. 47/2018 establishing recommended security measures for the processing and conservation of personal data; the Argentine Central Bank's Communication 6354, as amended by Communication 6375 and 6271; Digital Signature Act, Act No.25.506 of 2001, as amended by Decree No. 182/2019 on Digital Signatures; and Act No. 25.690 on Internet Service Providers. 11 https://www.argentina.gob.ar/noticias/el-comite-de-ciberseguridad-tuvo-la-primera-reunion-del-ano. 12 Source: World Bank Climate Change Knowledge Portal Jan 23, 2021 Page 8 of 18 The World Bank Digital Inclusion and Innovation in Public Services in Argentina (P174946) they lack access to updated technologies, basic infrastructure, adequate technical assistance and financial instruments that would allow them to manage risks more effectively. Argentina suffers an average of US$1.08 billion each year in direct asset losses and US$3 billion in welfare losses due to floods, while firms lose US$4 billion due to infrastructure disruptions. From 2000 to 2011 to flooding events affected 5.5 million people. Critical infrastructure systems, such as energy, transportation, water, waste, and digital communications, provide the backbone of modern economies and societies. Failures in these systems can result in large-scale economic losses and social disruptions. Strengthening digital platforms and access to critical services will help reduce impacts of disasters by ensuring business continuity, expediting access to critical financial and technical support for citizens and business after climate shocks and accelerating economic recovery. 16. The Modernization and Innovation for Better Public Services in Argentina Project (P157136) approved in February 2017 and closing in June 2021, has focused on improving the quality and accessibility of selected government administrative services and enhance transparency in the public administration. The project supported the implementation of the State Modernization Plan launched by the Government in March 2016 to advance the modernization agenda in the national public administration from a transparency and citizen-centric perspective. The design focused on delivering results in four selected areas: supporting online citizen centric processes; the electronic civil registry in the Province of Buenos Aires; an updated electronic procurement system; and an electronic workflow management platform for documents. 17. The successor Digital Inclusion and Innovation in Public Service project will expand the scope of this precursor operation by enhancing functionalities of existing digital systems, leveraging data analytics, boosting data-enabled innovation, enhancing IT infrastructure and expanding services provided by subnational government. The Digital Inclusion and Innovation in Public Service project is expected to become effective after the Modernization and Innovation for Better Public Services Project (P157136) has closed and fully disbursed. Selected public sector reforms from the previous project (such as the human resources management system reform and the asset declaration system for the Anticorruption Office) have not been included in the new project due to changes in government priorities. C. Proposed Development Objective(s) Development Objective(s) (From PAD) To improve the efficiency of and access to selected digital administrative services. Key Results 18. Successful achievement of the PDO will be measured with the following outcome level indicators: a. Users registered on the argentina.gob.ar portal with a citizen digital profile. b. Digital service centers established at the subnational level. c. Government digital procedures with reduced resolution times13 13 Reduced resolution times will be measured in terms of reduction in the time needed to resolve procedures (tramites) initiated remotely by citizens and firms and reduction in the time needed to resolve internal administratitve procedures carried Jan 23, 2021 Page 9 of 18 The World Bank Digital Inclusion and Innovation in Public Services in Argentina (P174946) D. Project Description 19. The project has four components. Component 1 supports the design and implementation of digital public services for citizens, firms and government entities; Component 2 strengthens cross-cutting public sector management systems, leveraging the use of information through data analytics techniques, and innovation in public services and platforms; and Component 3 supports the strengthening of technological infrastructure capabilities. Component 4 supports project management and evaluation. Component 1. Digital public services (Estimated cost: US$19.6 million) 20. This component supports the implementation and effective use of improved digital government services for citizens, business and government agencies at the national and subnational level and expands the availability of public venues to access digital government services . This component focuses on subnational governments (provinces and municipalities). The component will facilitate the government’s response capacity in the event of natural disasters and other climate-driven events. 21. Subcomponent 1.1. Design and implementation of national and subnational digital government services. This subcomponent supports the expansion of the Mi Argentina portal, the remote access platform TAD and the National Service Appointment System (Sistema Nacional de Turnos) for citizens, businesses and government entities14. This will improve the government’s response to climate-related shocks and strengthen the country’s resilience by ensuring continuity of government services. Activities under this subcomponent include, among others: a) development and application of standardized digital governance and digital government services diagnostics for selected national and subnational entities; b) design, development and implementation of online administrative services, including redesign of existing services to make them accessible for visually-impaired persons; c) technical assistance to support management of Mi Argentina and TAD platforms; d) training of personnel for the operation of redesigned processes; e) knowledge sharing and learning activities among national and subnational entities to disseminate lessons learned and exchange experiences on the implementation of digital systems and e- services, taking into account climate change and natural disaster considerations; and, financed through a Performance-Based Condition (PBC), f) redesign and implementation of improved government digital procedures, including those that can help government authorities better respond to climate-related shocks. 22. Subcomponent 1.2 Digital service centers. This subcomponent will strengthen existing digital service centers and expand new centers in underserved areas at the subnational level. Digital service centers will be designed to ensure continuity of services for citizens – and vulnerable groups in particular – in the event of climate-related shocks. Activities under this subcomponent include, among others: a) out by the public administration 14 Digital administrative services that will be prioritized are services that are critical for the expansion and improvement of the e-filing system, services that include procedures targeted to citizens and businesses, services that involve government procurement processes, including goods, services, public works and real-estate operations. The project will prioritize services with that have been processed at least in 500 occasions. Jan 23, 2021 Page 10 of 18 The World Bank Digital Inclusion and Innovation in Public Services in Argentina (P174946) procurement and upgrade of IT equipment and connectivity services for the operation and establishment of digital service centers to facilitate access to public services; b) design and implementation of a communication strategy and awareness campaign for the use of services targeting vulnerable populations, including support for the implementation of a federal training plan; c) implementation of a training campaign for digital service center operators, including disaster risk management and recovery responses when a natural disaster occurs; and, financed through a PBC, d) coordination and supervision of the operation of digital service centers. Component 2. Cross-cutting systems, data management and innovation (Estimated Cost: US$20.38 million). 23. This component supports the strengthening of key cross-cutting management systems and digital platforms and use of data to foster innovation in public service delivery. This component focuses on enhancing and improving existing digital government services through enhanced functionalities and piloting digital innovations in selected sectors. This component supports the use of data for innovation and service improvement, including the use of data for disaster risk management and climate change adaptation. 24. Subcomponent 2.1 Enhancement of cross-cutting systems and platforms. This subcomponent supports the strengthening of selected key government systems and digital platforms to increase efficiency in the provision of digital government services. Enhancements to cross-cutting platforms will improve the operation of digital government services and response during shocks, including natural disasters and other climate-related events. Activities under this subcomponent include, among others: a) design and implementation of enhanced functionalities, including process reengineering, system integration, upgraded security for the e-filing (GDE) and e-procurement (Compr.ar and Contrat.ar) systems; b) redesign of systems and services to make them accessible for visually-impaired persons; c) strengthening the functionalities of the Citizen Portal and expanding the service catalog of the TAD platform; d) upgrading and expansion of the Digital Signature platform; and, financed through a PBC, e) implementation of digital government systems in subnational governments. 25. Subcomponent 2.2 Use of data for service improvement. This subcomponent will promote the use of data generated by administrative systems and platforms to improve service delivery. Improvements will include entities managing disaster risks and natural disaster response and service providers, thereby enhancing their capacity to plan and respond to climate-related shocks. Activities under this subcomponent will include, among others: a) implementation of tools to support data analytics, including business intelligence, data warehouse and data processing tools; b) design and implementation of dashboards for government administrative systems to monitor and improve performance of key government services; c) enhancement of the open data portal, with new functionalities for users (public sector, general public and firms), and the development of an open data communication strategy that promotes the re-use of data by public agencies, civil society and businesses; c) support to monitor and implement OGP commitments in relation to open data in procurement, budgeting, transparency and citizen participation in monitoring audit recommendations; and d) application of international standards for Open Data where appropriate, to enable the access and use and re-use of data by government, civil society, and private sector. 26. Subcomponent 2.3 Digital innovation. Building on the data strategy and digital platforms, this component will promote innovation through work with public entities, the private sector and civil society. Innovations will consider, among others, solutions for and impacts on climate change adaptation, disaster Jan 23, 2021 Page 11 of 18 The World Bank Digital Inclusion and Innovation in Public Services in Argentina (P174946) risk management and gender inclusion. Activities under this subcomponent include, among others: a) the implementation of a public innovation center, to foster collaboration and co-creation among different stakeholders to improve the delivery of public services for citizens and businesses; b) implementation of a digital government observatory to monitor and support the digital transformation among public sector entities; c) support the technological infrastructure strengthening of the SIP; and d) implementation of innovation pilots to showcase the benefits in selected sectors based on the government’s strategic priorities and needs. Component 3. Expansion of technological platforms (Estimated Cost: US$45.2 Million) 27. This component supports the strengthening of the technological infrastructure to ensure that information is standardized, available in a timely, reliable, and secure manner. The component comprises support to strengthen and enhance ARSAT’s technological infrastructure to ensure service continuity and improve resilience, against threats ranging from cyber-attacks, natural hazards and climate change impacts. It includes support to expanding the capacity of ARSAT, including ARSAT’s National Data Center to respond to growing demand for its services. Activities under this subcomponent include, among others: a) enhancement of ARSAT’s data center’s capacity for data processing and storage to host information and communication services for government agencies, including the procurement of energy efficient equipment and technologies; b) expansion of ARSAT’s data center information technology capacity at its contingency center to strengthen business continuity services, including in the event of climate-related natural disasters; c) strengthening of the emergency response center team and cybersecurity services, including the improvement of their capacity to respond to climate-induced shocks and natural disasters; and d) technical assistance to selected public institutions to support the effective provision of ARSAT’s data center services, including for any equipment disposal and to ensure that equipment purchased and any upgrades to digital service centers use energy-efficient technologies. These improvements will follow mechanisms and protocols developed for the disposal of outdated equipment and hardware designed by ARSAT. Component 4. Project management and evaluation (Estimated Cost: US$3.52 Million) 28. The component supports project management and institutional capacity building for implementation and sustainability, leveraging the government’s existing resources and institutional structures. The component focuses on supporting the SIP’s Directorate of Sector and Special Projects (Dirección de Programas y Proyectos Sectoriales y Especiales, DIPROSE) manage and implement the project activities. Activities under this subcomponent include, among others: a) support for overall project management, including project coordination, change management and project monitoring and evaluation capabilities to strengthen DIPROSE; and b) technical assistance to the Secretariat of Strategic Affairs (Secretaría de Asuntos Estratégicos, SAE) in its mandate to design and implement diagnostics and evaluations of the digital government initiatives, to inform project supervision and long-term sustainability of the project’s interventions. Incentives for results feature 29. The project will combine investment financing and results-based financing. Investment financing will support: the acquisition of technological infrastructure; development and adaptation of critical public management platforms; technical assistance for reform management; and the delivery of associated public management capacity building and training activities. Investment financing will disburse against eligible expenditures for national public administration staff services. This allows the authorities to use World Bank procurement procedures for enhanced implementation support. Jan 23, 2021 Page 12 of 18 The World Bank Digital Inclusion and Innovation in Public Services in Argentina (P174946) Table 1. PBC Allocated Amounts Activity Policy Based Condition Amount (US$) 1.1.f Government digital procedures with reduced resolution times 4,000,000 1.2.d Visitors to digital service centers 4,000,000 2.1.d Subnational governments operating a digital government system 4,000,000 Total 12,000,000 30. Results-based financing through Performance-Based Conditions (PBCs) will incentivize effective implementation and achievement of key outcomes. PBC-related project activities are to be carried out by the SIP’s own staff and the underlying expenditures associated with them are calculated based on staff time and travel required for the effective implementation of each activity and achievement of the indicator. The Borrower through the SIP, will withdraw loan proceeds in the amount specified for each target by presenting evidence of the achievement of the agreed PBCs and details of expenses incurred under agreed underlying expenditures by the SIP. The project’s Operational Manual (OM) will provide detailed guidance on the verification protocols and eligible underlying expenditures for each PBC. A verification mechanism acceptable to the World Bank will periodically verify achievement of agreed targets. Reimbursement of expenses will be made into the Treasury Single Account in the Ministry of Finance. Budget item costs eligible for reimbursement are separate from the item costs eligible for input- based activities and both can be disbursed independently from each other (See Annex 3 for details on the budget lines and PBC verification protocols). Experience with the on-going Modernization and Innovation for Better Public Services in Argentina Project confirms that the use of PBCs is effective in maintaining implementation momentum and helps the project achieve ambitious goals in a context of fiscal constraints. Use of PBCs improves predictability of access to funds for the implementing agency and thereby helps deliver expected results and sustain disbursements as planned. . . Legal Operational Policies Triggered? Projects on International Waterways OP 7.50 No Projects in Disputed Areas OP 7.60 No Summary of Assessment of Environmental and Social Risks and Impacts . 31. The potential environmental risks are assessed as Low and social risks are assessed as Moderate, and the overall risk for the project is classified Moderate. The project will be implemented at Jan 23, 2021 Page 13 of 18 The World Bank Digital Inclusion and Innovation in Public Services in Argentina (P174946) a national level, facilitating ICT infrastructure and connectivity to minimize access gaps throughout the country. Activities are planned to support the implementation and effective use of improved digital government services for citizens, businesses and government agencies at the national and subnational levels and to expand the availability of public venues to access digital government services. Component 1 includes activities focused on subnational governments (provinces and municipalities) to facilitate access to digital government services to citizens and firms. Beneficiary provinces and municipalities will be identified during project implementation. Activities will not involve civil works. Digital service centers will be established in existing public buildings that are accessible to the general public, with minimal restrictions, including universal access for people with disabilities. The expansion and improvement of ICT infrastructure under Component 3 involve the purchase of new equipment and hardware. All equipment, servers and data storage technologies will be installed in the facilities of ARSAT. These investments will not entail civil works. ARSAT already has the necessary space within its existing buildings. No physical or economic displacement will take place under the project. 32. The environmental risks and potential impacts are assessed as limited. Currently, no civil works are planned. Environmental, community and occupational health and safety measures are or will be adopted in the digital service centers which are or will be established in public offices that comply with relevant requirements (regulatory and good practices), including those related to COVID-19. The ICT equipment and systems financed by the project will complement the existing infrastructure at the National Data Center managed by ARSAT. Building on the measures that are already being implemented under the current operation, the project will continue to support ARSAT to improve the effectiveness and quality of environmental management protocols, including proper disposal of e-waste. ARSAT manages critical, top-quality security systems and has efficient environmental management systems. However, the appropriateness of procedures and management systems needs to be confirmed or strengthened to ensure compliance with the World Bank´s Environmental and Social Standards. The principal environmental risks and potential impacts are related to the handling and disposal of e-waste, and community health and safety aspects at the digital government services centers (for example: universal access; ventilation conditions; emergency preparedness; COVID-19 related protocols). 33. The main social risks are associated with the potential exclusion of vulnerable groups from participating in the benefits of the project. These risks include potential barriers to access and benefit from project financed activities for groups such as indigenous peoples, people with disabilities, and LGBTI, among others. Specific measures will be implemented to ensure that these groups are provided an opportunity to participate in the planning and design of services that affect them and activities are designed taking cultural or personal sensitive issues into account. Activities that could have an adverse impact on vulnerable and excluded groups should be avoided or otherwise minimized and mitigated. 34. A Social and Environmental Assessment (SEA) for the project, proportionate to the risks, has been developed by the E&S team of DIPROSE, with guidance from the World Bank team. The SEA identifies environmental and social risks, potential impacts and mitigation measures, as well as the responsibility of different entities in the implementation and supervision. A consultation plan and strategy has been developed to engage with relevant stakeholders during the preparation and implementation of activities. Some exchanges took place to inform the SEA in November and December 2020 (different pertinent areas within the SIP - País Digital, Innovación Administrativa, TAD, Mi Argentina; ARSAT; the Ministry of Woman, Genders and Diversity). In addition, the E&S team of DIPROSE implemented, between January 14 and 19, 2021, a focus-group consultation with key government stakeholders such as the National Secretariat of Human Rights (Secretaria de Derechos Humanos de la Nación), the National Jan 23, 2021 Page 14 of 18 The World Bank Digital Inclusion and Innovation in Public Services in Argentina (P174946) Institute of Indigenous Affairs (INAI), the National Disability Agency (ANDIS), the Ministry of Women, Genders and Diversity, the National Institute Against Discrimination, Xenophobia and Racism (INADI), the National Directorate of Policies for Seniors, Secretariat of Children, Adolescents and Family (within the National Ministry of Social Development), the Ministry of Health, ARSAT, the National Communications Agency (Ente Nacional de Comunicaciones, ENACOM), the Federal Council of Public Functions (Consejo Federal de la Función Publica, CoFeFuP), and the Secretariat of Municipalities of the Ministry of Interior. At the request of the Ministry of Health, a separate meeting with their team was also carried out. Generally, the consulted sectors and all participant parties provided their support and shared information as needed. The draft version of the SEA was disclosed in country on January 11, 2021, and on the World Bank’s external website on January 22, 2021. 35. DIPROSE´s E&S team has drafted a Stakeholder Engagement Plan (SEP). The SEP has been informed by the findings of the SEA and includes a plan for consultations with other government institutions and organizations from civil society that represent the identified vulnerable groups. The SEP also includes a stakeholder engagement strategy focused on the vulnerable groups identified above and information on the project’s grievance rederess mechanisms. The draft SEP was initially presented and consulted along with the SEA in the focus-group consultation between January 14 and 19, 2021. A revised draft of the SEA and the SEP were published in country on February 5, 2021 and in the WB external website on February 8, 2021. A Public Consultation, involving citizens in general, CSOs and key government stakeholders will take place during the first three months of project implementation after the project’s date of effectiveness. The specific timing of implementation, along with the mitigation measures identified in the SEA and the SEP as well as other actions needed to comply with the WB Environmental and Social Standards, are described in the Environmental and Social Commitment Plan (ESCP). E. Implementation Institutional and Implementation Arrangements 36. The Secretariat for Public Innovation (SIP) will be the implementing agency for the project . Annex 1 provides details of implementation arrangements. SIP is subordinate to Chief of Cabinet of Ministers (Jefatura de Gabinete de Ministros, JGM) in the Office of the Presidency. SIP leads the digital and open government strategy and is responsible for regulation, service delivery and core digital systems. SIP is the implementing agency for the ongoing Modernization and Innovation for Better Public Services project (P157136). SIP will provide overall leadership, strategic guidance and coordination for project activities. The Modernization and Innovation for Better Public Services project (P157136) is scheduled to close on June 30, 2021, before the Digital Inclusion and Innovation for Public Services Project (P174946) becomes effective. 37. The Directorate of Special Projects (DIPROSE) within SIP will provide administrative support to project activities. DIPROSE will: prepare annual Procurement and Implementation Plans; ensure compliance with World Bank financial management (FM) and procurement regulations and environmental and social requirements; manage procurement following the Procurement Plan; oversee technical inputs from all institutions involved in the project; hire an external party as an independent mechanism to verify achievement of agreed-upon PBCs to trigger disbursements; liaise with the World Bank and monitor and report on progress. Under the Modernization and Innovation for Better Public Services Project (P157136), DIPROSE acted proactively to solve operational bottlenecks, demonstrating Jan 23, 2021 Page 15 of 18 The World Bank Digital Inclusion and Innovation in Public Services in Argentina (P174946) strong implementation capacity. While some of DIPROSE’s staff were changed by the new administration in July 2020, staff responsible for core procurement and FM functions were retained. DIPROSE staff are familiar with project implementation arrangements and World Bank procedures. 38. DIPROSE will oversee the coordination and monitoring of the environmental and social management of the project, through its Environmental and Social (E&S) team. It will also act as a direct interlocutor with the World Bank team and will be responsible for environmental and social management and implementation of measures identified in the Social and Environmental Assessment (SEA), the Stakeholders Engagement Plan (SEP), and all the actions established in the Environmental and Social Commitment Plan (ESCP). DIPROSE will carry out these responsibilities in close coordination with other substantive areas of the SIP and entities relevant to the project, as well as with organizations specialized in serving vulnerable groups, including among others the National Agency of Disability (Agencia Nacional de Discapacidad, ANDIS), the National Institute of Indigenous Peoples (Instituto Nacional de Asuntos Indígenas, INAI), and the Ministry of Women, Gender and Diversity (Ministerio de las Mujeres, Géneros y Diversidad, MMGyD). The environmental and social capacities of DIPROSE will be strengthened by appointment of a social specialist who will be responsible for follow-up and monitoring of the relevant aspects of the SEA and SEP. 39. Beneficiary entities will participate in the implementation of their respective project activities and the monitoring of results. Participating institutions include: provincial and municipal governments; ARSAT, the state-owned company that provides telecommunications services to government entities; SAE; and entities participating in the innovation pilots. When applicable, inter-institutional agreements will be signed between participating entities and SIP for project financed activities. These agreements will define the scope of the services, goods and technical assistance that will be provided by the project through SIP and the role and responsibilities of the entities involved. DIPROSE will have dedicated staff to coordinate with participating entities and support the implementation of these activities. DIPROSE will be responsible for all financial management and procurement activities under the project. No project funds will be transferred to other entities during project implementation. 40. An Operational Manual (OM) will detail processes and procedures governing the project. The OM will lay out the procedures for the implementation, reporting, monitoring and evaluation of the project, including verification protocols to confirm PBC achievement; the organizational structure of the project, including the roles and responsibilities of DIPROSE; project procurement and financial management requirements and procedures; project environmental and social requirements and procedures; the project’s chart of accounts and internal controls; the indicators to be used for project monitoring and evaluation; and the verification protocols for PBCs. The approval of the OM will be a condition for project effectiveness. . CONTACT POINT World Bank Silvana Kostenbaum Public Sector Specialist Jan 23, 2021 Page 16 of 18 The World Bank Digital Inclusion and Innovation in Public Services in Argentina (P174946) Marco Larizza Senior Public Sector Specialist Borrower/Client/Recipient Republic of Argentina Implementing Agencies Secretariat of Innovation, Chief of Cabinet Office Julian Sette International Finance Directorate settej@jefatura.gob.ar Diego Bercholc Undersecretary for administrative management BercholcD@jefatura.gob.ar FOR MORE INFORMATION CONTACT The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects APPROVAL Silvana Kostenbaum Task Team Leader(s): Marco Larizza Approved By Practice Manager/Manager: Country Director: Paul Procee 17-Feb-2021 Jan 23, 2021 Page 17 of 18 The World Bank Digital Inclusion and Innovation in Public Services in Argentina (P174946) Jan 23, 2021 Page 18 of 18